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Samsung Electronics Co. Ltd. reported a net profit drop of 16.8% to 4.54 trillion Korean won or $4.0 billion during the third quarter, as the problematic recall and discontinuation of its Galaxy Note 7 smartphone trimmed the tech firm's mobile earnings to its lowest level in almost eight years.
Samsung's mobile operating profit sank 96% from a year prior to 100 billion won after the Galaxy Note 7 was pulled from the market due to reported incidents of overheating. The company initiated a global recall on September 2 to replace the units, but decided to scrap the smartphone altogether on October 11 as reports that Note 7 are still fire-prone surfaced.
Total operating profit for the third quarter plunged 30% to 5.2 trillion won, a steep decline from almost 7.4 trillion won a year prior. Meanwhile, revenue declined 7.5% to 47.82 trillion won. The South-Korean company had initially projected a 7.8 trillion won profit but trimmed its guidance, adjusting the figures to reflect the losses sustained from the withdrawal of the Note 7.
Still, the company had an optimistic outlook for the fourth quarter and expects the earnings to regain ground and to reach the same level seen during the fourth quarter of 2015.
